The FTSE 100 managed to hold on Monday, sidestepping most of Asia’s weakness, as precious metals helped support the index.
Despite strong gains for miners such as Fresnillo, the FTSE 100 was trading marginally weaker at 9,710 at the time of writing as investors looked to Asia and risks to the recent optimism sparked by Fed rate cut hopes.
“The FTSE 100 dipped in early trading on Monday despite post-Thanksgiving gains for US markets last week,” said AJ Bell investment director Russ Mould.
“Further selling in cryptocurrencies reflected a risk-off mood as did some volatility in Asian markets – with Japan’s Nikkei 225 seeing material weakness.
“This followed a move higher for the yen, which affects the competitiveness of Japan’s export-heavy economy, on speculation the Bank of Japan might increase interest rates this month. US futures also pointed to a lower open on Wall Street later.
Miners were among the top risers after being buoyed by takeover interest in small-cap Solgold from China. Those with a gold weighting, such as Fresnillo and Endeavour, were the top risers in the sector.
“A small cap miner seen as a potential takeover target for BHP is now in the sights of China’s largest integrated copper producer,” Coatsworth said.
“SolGold has rejected two approaches from its biggest shareholder Jiangxi Copper, the second pitched at 26p per share which values the UK-listed miner at £781 million.”
Investors will hope Chinese players have their eyes on other UK-listed miners that still trade at very attractive valuations.
BP and Shell were slightly higher as oil prices received a boost from news that OPEC+ would hold off on increasing production.
“Oil prices climbed nearly 2% this morning, with Brent closing in on its highest price in over a week, after OPEC+ reaffirmed plans to freeze production increases through the first quarter,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“The move comes as the group wrestles with uneven demand and looming oversupply risks, while traders weigh fresh geopolitical tension following US warnings over Venezuelan airspace. Still, upside looks limited with hopes for a Russia-Ukraine peace deal that could unlock sanctions and flood the market with additional supply.”
Ukraine peace deal hopes were also evident in defence stocks Babcock and BAE Systems, which were among the top fallers.
Melrose was the FTSE 100’s top faller after its CFO announced they would step down. Melrose was down 5% at the time of writing.